Commentary

Instagram is easily one of the best tech acquisitions of the past five years. In exchange for a billion bucks, Facebook got a mostly mobile network that won’t stop growing, while continuing to beat out the hottest upstarts for ad dollars.

Yet as its star has risen, Instagram has become a hotbed of shady marketing
tactics, and influencers who specialize in blurring the line between their personal and paid-for product preferences.

The problem is so bad that the Federal Trade Commission recently urged 90 or so Instagram influencers to step up their transparency game.

Taking the
matter seriously, Instagram will now require influencers to accompany sponsored posts and stories with a “Paid partnership with” tag.

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Instagram said this week that it plans to roll
out the tag, positioned as a timesaver for brands and influencers, over the next month.

If not quite a make-or-break issue, analysts say Facebook is wise to heed the FTC’s
warning.

“Facebook doesn’t want to be in the business of getting [government] fines,” said Pivotal Research analyst Brian Wieser.

To help content producers swallow
what to some might taste like a bitter pill, Instagram is packaging the change with additional data offerings.

“With the new tool, the creator and business partner will have access to
insights for the post,” an Instagram spokeswoman said Wednesday.

Some content producers are welcoming the change as an opportunity to strengthen ties with followers.

“The
relationship we have with our audience is built on trust,” said Hallie Johnston, SVP of client services and branded content strategy at Refinery29. The lifestyle publisher is adopting the tag to
make its paid relationship with Revlon clearer, a move that Johnston said represents an “opportunity to provide even deeper transparency and continue to honor that trust across
Instagram.”

Even compared to other social platforms, influencers are obsessed with Instagram. In fact, 92% of influencers say the Facebook unit is their main focus, according to a recent
survey conducted by micro-influencer marketing firm #Hashoff.

By 2019, meanwhile, the sponsorship money Instagram influencers get is on pace to more than double -- from about $1 billion this
year to nearly $2.4 billion -- according to recent estimates from
Mediakix.